Unlock Better Rates with a Specialist HMO Remortgage
An HMO is a house in multiple occupation, and for many landlords it is a strong way to build rental income. An HMO remortgage simply means replacing your current loan with a new one. Done well, it can secure a better rate, give you more flexible terms and release equity you can reinvest.
Commercial Finance Network is a whole-of-market broker, so we search specialist lenders across the market for HMO remortgage deals. We work with landlords across the UK and internationally, and our aim is to make the process clear and straightforward.
Top Reasons to Remortgage Your HMO Property in the UK
Landlords remortgage for a number of reasons. Here is a look at each one.
Lower Monthly Payments with Better Rates
If your current rate is high, a new HMO mortgage could reduce your interest and lower your monthly payments. Even a small fall in HMO remortgage rates can save thousands of pounds over a term, which you can put back into the property or use to build more income.
Release Equity to Grow
Equity is the difference between what your property is worth and what you owe. If your HMO has risen in value, you may be able to release some of that equity, then use it for a deposit on another HMO or to expand your portfolio. To see how much a remortgage could release after fees and any early repayment charge, try our HMO mortgage calculator.
Get Ready for Exit Fees or Term Expiry
When a fixed rate ends, lenders often move you onto a standard variable rate, which can cost significantly more. Some deals also charge an early repayment fee if you leave in the first term. Remortgaging before the fixed term ends helps you avoid paying more than you need to.
Consolidate Debt
If you have several loans or credit commitments, a remortgage can sometimes bring them together into one loan secured on the property. That can reduce your monthly outgoings, but it also means you are repaying the debt over a longer term, so we look at the total cost with you first.
What Lenders Check on an HMO Remortgage
Lenders assess an HMO remortgage on the same basis as an HMO purchase, with the addition of your existing loan and any early repayment charge. In general:
- Most lenders lend up to 75% of the property value, and some specialist lenders go to 80%.
- The rent must cover the interest by 125% for a basic rate taxpayer or limited company, and 145% for a higher rate taxpayer or personal borrower, usually stress tested at a rate of around 5% to 5.5%.
- Lenders usually want to see around a year of experience as a landlord.
- The HMO licence, fire safety and room sizes must be in order, and the valuation must support the loan.
If your fixed rate is still running, an early repayment charge may apply, so the timing of the switch matters. The full checks are covered in how lenders assess HMO mortgage applications.
Which HMOs Can Be Remortgaged
Most HMOs can be remortgaged, but the type of property changes which lenders will look at it. The cases we see most often are:
- A student let or multi-tenancy HMO, usually in a university town or city centre, where the rooms are let individually.
- A landlord with several HMOs, who wants one portfolio remortgage rather than separate loans.
- A house that was a family home and has since been converted, where the lender will want to see the licence and the work signed off.
- A building that is part commercial, such as a shop with flats above, which fewer lenders will take on.
How an HMO Remortgage Works
The process runs in five stages, and the first three are where most of the time is saved.
We begin with a conversation about what you want from the new loan, whether that is a lower rate, cash released or a longer fixed term. We look at your current balance, the likely value and what the property earns.
We then compare the lenders whose criteria suit your property, looking at the rate, the fees and any early repayment charge on the loan you are leaving.
Next we prepare the application and the supporting documents so the lender has what it needs the first time, which avoids the delays that come from going back and forth.
Once an offer is issued, we stay in touch with the valuer, the lender and your solicitor until the legal work is done. On completion, the new loan replaces the old one and the new terms begin.
Why Landlords Use Us for an HMO Remortgage
If you are weighing up a broker, these are the points that matter on an HMO remortgage:
- We search specialist lenders, challenger banks and high-street providers, so the choice is not limited to one type of lender.
- We explain our fees before you commit, and we keep to plain English throughout.
- We work around your own aims, because a landlord releasing equity needs a different loan from one who is simply moving off a rate that is ending.
- We act early on valuation and licence queries, because they are the usual cause of delay.
- We also support landlords based overseas, including expats with UK HMO portfolios.
What kinds of HMOs can I remortgage?
All kinds – including small shared houses, large licensed HMOs, student rentals, and semi-commercial properties.
Will my rental income affect eligibility?
Yes. When you apply for a new HMO mortgage, lenders look at how much rent you generate compared to how much you repay. This is called the affordability assessment.
The more your HMO generates in rental income, the better terms you can typically secure.
Can I release equity from my HMO?
Yes. Many landlords refinance their HMO mortgages to release equity from their properties.
You can then use this money to buy new properties, refurbish existing ones, or fund other investments.
Do I need an HMO licence to remortgage?
Yes, in most cases. Lenders will want to see your HMO licence before they approve your remortgage – if your property legally requires one.
Will I get different rates on an HMO remortgage compared to a normal buy-to-let?
Most likely, yes. HMO deals usually come with slightly higher rates because lenders view them as more complex and a bit riskier – more tenants, more maintenance, more variables.
The good news – specialist HMO lenders often offer far better terms than the big high-street banks, because they actually understand HMOs.
Can I remortgage my HMO even if it is not fully occupied right now?
Yes. It just might take a bit more explaining. If you have a couple of empty rooms, lenders will want to know why and how quickly you expect to fill them.
They will also look more closely at your own experience and income to make sure the mortgage remains affordable between tenants.
Do I need all the licences and paperwork sorted before applying?
Yes – this is very important. Lenders want everything fully signed off and above board before they move forward.
If your HMO licence or planning consent is still pending, most lenders will pause until it is finalised. It is not personal – they just need to be sure the property is legally good to go.
Will my room-by-room rental income count toward the remortgage?
Yes. This is one of the biggest advantages of owning an HMO. Lenders look at the income from all your rooms to assess affordability.
The stronger and more reliable your rental income, the smoother the remortgage process tends to be.
Can I remortgage an HMO that I recently converted?
Yes, but timing matters. If you have only just finished the conversion, some lenders may want to see a few months of rental history first.
Others are happy to work off projected income, provided the conversion and licensing are properly completed. An experienced HMO broker can point you to the lenders who are more flexible with newly converted HMOs.
What if my HMO does not meet current safety standards?
You will need to fix that before most lenders will even look at your application. Fire doors, smoke alarms, escape routes, and proper room sizes are non-negotiable.
HMO mortgage lenders do not just want the paperwork – they want to know the property is actually safe for tenants. If anything is missing, get it sorted first and you will have a much smoother remortgage process.
Ready to Get the Best HMO Remortgage Deal?
Contact us today to find out about the best HMO remortgage options for your needs. As a whole-of-market commercial finance broker working with landlords in the UK and abroad, we search the whole market for you and our experienced HMO mortgage brokers will guide you every step of the way.
Call: +44 1494 622 111
Email: info@cfnuk.com
Commercial Finance Network is authorised and regulated by the Financial Conduct Authority.
Your property may be repossessed if you do not keep up repayments on a loan secured against it. HMO and other investment or business-purpose property lending is not regulated by the Financial Conduct Authority.
Related Pages
- HMO Mortgage Requirements UK – what lenders assess on HMO applications including deposit, ICR, licensing and landlord experience
- Debt Servicing Ratios in Complex HMO Finance Deals – how DSCR is calculated and why a deal can pass rent cover and still fail
- Why Some HMOs Cannot Be Financed – the valuation, licence and affordability issues that stop an HMO remortgage
- Funding an HMO Conversion – how to finance a conversion and move to a longer-term HMO mortgage afterwards
- Bridging Loans – short-term finance for HMO acquisitions, refurbishments and conversions before longer-term refinancing
